Before you start buying or trading cryptocurrencies, you must be familiar with blockchain technology and smart contracts. In this article, we will talk about smart contracts, which are an essential part of the blockchain and enable decentralised exchanges (DEX) like PurpleX to run without middlemen.
Why should you know about smart contracts and blockchain?
If you are a crypto trader or planning to start trading cryptocurrencies, you should know that blockchain is a crucial part of all digital assets. Blockchain is a distributed ledger technology on which most cryptocurrencies are based. Blockchain allows cryptocurrencies to be exchanged globally in a peer-to-peer fashion without the need for middlemen. This is made possible through smart contracts.
A contract is a legal agreement between two or more parties that defines and governs the rules of a particular transaction or other business arrangements.
In the case of blockchain technology and DApps (decentralised applications), smart contracts play a crucial role because they allow transactions to be performed without intermediaries. Smart contracts work as any regular contract where the rules of an agreement are written in code form and are designed to be executed automatically upon the fulfilment of underlying conditions.
A blockchain smart contract can be created using any supported programming language. It is pure code with zero or minimal human interference. A smart contract once deployed cannot be edited or manipulated.
There are many advantages of using smart contracts in crypto transactions, such as:
A smart contract is a computer program that encodes the conditions of an agreement and is embedded in a blockchain.
A business looking to create a smart contract will connect with a blockchain developer with conditions and criteria for building a smart contract for a particular purpose such as payment authorization, purchase or sale, shipment, etc.
In the case of a decentralised exchange, smart contracts have the primary role of executing trades without an intermediary. These contracts are designed with conditions of peer-to-peer trading and will execute based on the matching of buy-sale orders in the same. Once a buy order matches with a compatible sale order and the underlying conditions are met, the contract will execute automatically and instantly.
Once a transaction on a DEX is executed, the transacted tokens are instantly credited to the buyer’s account and the funds are transferred instantly from the buyer’s account to the seller’s account. The probability of fraud is practically nil and the transaction is easy to verify and trace in case of a dispute.
There are many other benefits of trading cryptocurrencies with the Purplex DEX, such as advanced and highly secure Binance blockchain technology, user-friendly interface, instant exchange, 100% and always online, impossible to hack, fully transparent and anonymous, and immutability of conditions.
Start trading top cryptocurrencies and digital assets at https://purplx.io.
